Numbers don’t lie, but they are ill-equipped to adequately articulate the nuance of our collective wealth. The African-American money story is rooted in a fight for fairness, access to resources and a restoration of our humanity. And at the heart of this story is a desire for this nation to finally make good on the material returns it promised African-Americans in exchange for centuries of sacrifice, service and servitude.
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BY KARA STEVENS · NOVEMBER 12, 2019
FROM THE GI BILL AND BABY BONDS TO THE STUDENT BORROWER BANKRUPTCY RELIEF ACT OF 2019, ONE MONEY EXPERT WEIGHS IN ON WHAT IT WILL TAKE TO BREAK THE CYCLE OF “BROKE”
Numbers don’t lie, but they are ill-equipped to adequately articulate the nuance of our collective wealth. The African-American money story is rooted in a fight for fairness, access to resources and a restoration of our humanity. And at the heart of this story is a desire for this nation to finally make good on the material returns it promised African-Americans in exchange for centuries of sacrifice, service and servitude.
According to the Institute for Policy Studies, the median wealth of Black families is just 2 percent of the median wealth of White families—that’s $3,600 for Black families compared with $147,000 for White families. In other words, White families possess 41 times more wealth than Black families.
Unlike income, which is earned in the labor market, wealth is built primarily by the transfer of assets across generations, thus making it possible to possess a high income and little wealth or low income and significant inherited wealth or any other combination along the wealth–income spectrum. The reality is that Black households with median wealth near or below zero pass down generational poverty, while White households with substantial resources bequeath generational wealth.
Conversations around reversing the racial wealth gap often begin and end with a narrative that is equally as pernicious as the wealth inequalities it tries to explain away: The wealthiest in our country earned their riches fair and square, and by the sweat of their brow; on the other hand, our poorest and most vulnerable are deadbeats and deserve their wretched lot due to weak morals and bad decision-making. But this is a lie.
A quick look at our country’s economic history will reveal that White wealth is more a function of U.S. government-backed supports aimed at ensuring White success rather than the dishonest narrative of individual grit, smarts, exceptionalism and hard work. After World War II, for example, veterans were offered federal aid through the GI Bill to purchase homes, farms and businesses; get jobs; and pursue an education.
Though this was a race-neutral policy on paper, it’s been documented that Black veterans received far less assistance and access to these benefits than their White counterparts. In fact, upon their return home, thousands of Black veterans were denied admission to colleges, turned down for loans for housing and business, and excluded from job-training programs throughout the Jim Crow South as well as the North. Seventy-five years later the GI Bill has served to establish, strengthen and expand the White American middle class while simultaneously destabilizing the Black American one.
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